Different Strategies
As Korean panel makers are pursuing high margin and large TV-oriented production strategies, LCD TV panel shipments are expected to decline for two consecutive years next year.
According to the TV panel industry and market research firm IHS on November 30, worldwide LCD TV panel shipments are expected to reach 261.6 million units this year, down 5 percent from last year. This forecast was triggered by the stagnation of the TV market from the end of last year through the end of the first half of this year.
LG Display, which ranked No. 1 in the LCD TV panel market for 28 consecutive quarters, is forecast to ship 52 million units this year, down from 55 million last year. Samsung Display in a process to restructure its LCD panel production lines is expected to contract its LCD TV panel shipments to 48 million units this year from 51 million units last year. Among the top six panel makers, only China’s BOE and China Star saw their LCD shipments increase this year. This is because they added eighth generation lines which produce large-sized panels in the second half of this year.
Korean companies’ LCD TV panel shipments are expected to decline sharply next year. The market research institute expects LG Display to produce 51 million LCD TV panels next year, down by one million from this year. It is also forecast that Samsung Display, which began to remove its aged LCD TV line at Tangjeong Plant in Chungcheong Province this year, will about 40 million units next year, down by eight million units from this year.
According to an IHS forecast, shipments of Korean LCD TV panels, which combine those of LG and Samsung next year, will shrink by 15 million units to 91 million units from 2015 (106 million units) which is two years ago. This means that shipments of new domestic TV panels shrank by 14 percent in two years.
On the other hand, next year, it is predicted that Taiwan’s Innolux will come to prominence next year. LCD panel shipment of Innolux which was one of the top three frontrunners with Samsung and LG, dropped sharply to 40 million units this year, relegated to fourth place by BOE. However, it is expected that next year, Innolux will increase its shipments to 47 million units thanks to the expansion of production facilities and will fight a fierce battle with LG Display to seize the top position. To top it off, next year, Innolux may become the number one company in the large-sized LCD panel market by absorbing LCD panel lines from Japan's Sharp acquired by its parent company, Foxconn.
Large TV strategies are playing a key role in making different forecasts on Korean companies and Innolux for next year. “The global TV market entered an era where TV screen sizes average 40 inches. Sales of 60-inch TVs or larger TVs are expected to grow more than 20 percent next year, an industry observer said. “Total shipments will be inevitably reduced as Samsung and LG will change their production strategies in line with a trend for bigger TVs.”
“Seventh and eighth generation lines optimized for 40-inch or larger panels eclipse the fifth and sixth generation lines for 30-inch-level panels by more than ten percent in terms of added value,” he added. “That's why Korean companies gave up a quantitative battle and are taking large panel strategies centered on profitability.